11 ms·
Portland resident here. What this article doesn't cover, is now locals are victim of gentrification. Rent prices are almost 2x, out of state buyers are throwing
by simook 11y ago
Portland resident here. What this article doesn't cover, is now locals are victim of gentrification. Rent prices are almost 2x, out of state buyers are throwing all cash offers on houses, and overall housing supply is low... I'm sure the commercial market is just as bad.
Interesting times.
- paavokoya 11y agoHaving grown up in Portland, it's remarkable how quickly the housing prices have skyrocketed in less than 5 years.
- mcguire 11y agoWhen did San Francisco become the hot property? I know that the last time I was out there, about 2005, tech was still in the valley and SF proper was relatively low rent, bad neighborhoods, and no tech presence. Does this industry (to the extent that you can call AirBNB, Uber, and Twitter the same industry) really act like a flock of grackles or starlings, descending on a place, eating everything, and moving on?
- api 11y agoIt seems to be full of people who want to be near art and "cool" people. Unfortunately tech doesn't find a way to pay those creators of culture anything. If anything, the focus is on finding ways to make everything free. So tech moves in, enjoys the presence of creative culture they refuse to fund, but ultimately inflates real estate so much they drive that creative culture away. Rinse and repeat. If art and culture are so valuable to us why are those who create these things so poor? Why do people cringe at buying an album for $9 but then spend $11 on a coffee and a biscuit?
- cloudjacker 11y agoBecause its not just any form of expression that people want. The artists shouldn't have balked at taking a class in economics.
- Apocryphon 11y agoI'm not sure if a lot of the hip tech transplants want art. They just want the aesthetics.
- api 11y agoI think what they want is culture, which is produced by people who love their communities and who don't work 90 hours a week so they have time to actually do it.
- gd2 11y agoTrue, but isn't part of it that one thinks that on the $9 album, the marketing and media company folks gets $8.50 of $9.00 But there is also artistry in creating a coffee or dining experience, and hopefully that money spent on the meal and coffee goes more to the chef artist who prepared the meal, the architect artist who designed the space, and the line cook, waitress and dishwasher.
- seivan 11y agoTech isn't creative and artistic? Why is an "album" worth more than a graphics engine, drawing app or game? If anything music is overvalued. I'm surprised we haven't automated Skrillex and all that house crap yet. ;-)
- prmph 11y agoOne interesting explanation is that people seem to think (maybe rightly) that art and culture are cheapened by too much money. To be authentic, art and culture needs to be nearer to the struggling edges of society.
- rco8786 11y agoIt's part of a nationwide(global?) urban renewal. Millenials and their successors are more likely to want to live in urban areas and stay single longer than their older counterparts. This is causing rents to increase noticeably in nearly every major urban area. Couple that with relatively high pay for tech sector jobs that like to hire these younger folks and you get it even worse in SF, Seattle, etc.
- ghaff 11y agoBe careful of overgeneralizing from the subset of the population you interact with in tech. For example, according to this FiveThirtyEight piece from last year, the actual trend is that college-educated millennials are slightly more likely to move to a subset of dense cities. [1] In general, it's unclear how much of an overall urbanization trend there is. [1] http://fivethirtyeight.com/features/why-millennials-are-less-urban-than-you-think/ http://fivethirtyeight.com/features/why-millennials-are-less...
- guyzero 11y agoSeriously that was 11 years ago. Yes, a lot of things changed in 11 years.
- mcguire 11y agoThat's my point. 11 years may seem like a long time to you, but it's really not. I've seen quite a few people here wanting high-rise residential buildings in San Francisco to alleviate the high rents there. A skyscraper is at least 40 floors, according to wikipedia and one rule of thumb I've seen puts the construction time for them at 1 month per floor, from ground breaking to completion. That's about 4 years in construction, plus design and planning time, plus site acquisition. That's five, six years (more?), total, even in the most positive political atmosphere. Someone who wanted to alleviate SF's high rents today, assuming you could do that by building high-rise apartment buildings, would had to have started at the height of the construction bust. That would be, I think, before San Francisco proper's tech boom, i.e. before there was a problem evident. And if you started building one today,... Once upon a time, Intel planned to build a 10 story office building in downtown Austin. They stopped, with nothing but the structure of the building up, in 2001. The incomplete building was demolished in 2007.
- ghaff 11y agoYep. The government and people of San Francisco and Silicon Valley could wake up tomorrow, all with the simultaneous revelation that OMG we need to build a massive amount of new housing and all the associated transportation and other infrastructure needed to support it. And you might start seeing the initial fruits in a decade. Meanwhile, in the real world, if attitudes and policies were to start shifting, 15 to 20 years is probably a more realistic planning horizon.
- guyzero 11y agoIn 2008 I moved out of Toronto and when I went back a few years later there were dozens of new high- and mid-rise buildings that had been built downtown. Telus Tower was built from 2007 to 2009, 32 stories. 120 Bremner is 30 stories, same time period. Cityplace has about two dozen high-rise residential towers that were all built in 2-3 years and are 30+ stories tall. It does not take 4 years to construct a highrise. https://en.wikipedia.org/wiki/CityPlace,_Toronto https://en.wikipedia.org/wiki/CityPlace,_Toronto
- nostrademons 11y agoEarly adopters started moving in 2006 (remember the YScraper?). It really accelerated around 2010, when the economy started recovering. Prices started rising in earnest in the second half of 2011. I know a number of people here who are praying for a tech crash so they can afford housing again.
- davidw 11y agoPrices were already going up a lot in the dot com days.
- nostrademons 11y agoYeah, and then they went down in the dot-com crash, and then they went up again from 2005-2007, and then they went down again in 2009. I moved to Mountain View in 2009. In late 2008 (as the crisis was hitting the stock market, but before landlords had realized it would affect them), a realtor was showing me around, and I asked about a swanky corporate apartment complex we drove by. "Oh, that's out of your price range - they charge $2000+/month." I ended up living there for $1400/month in 2009-2010, then they started jacking up the rent. When I left in 2013, they turned around and rented it for $2700/month.
- Chlorus 11y agoAnd I'm sure it has nothing to do with the urban growth boundary or increasingly restrictive land-use regulations.
- pklausler 11y agoMetro (being the Portland area's multi-county regional government) voted last year to not expand the urban growth boundary. So the supply of single-family homes with yards is basically fixed, while demand is growing. Expect home prices to continue to grow (Portland's rate is top in the U.S.) as new housing construction continues to be constrained to dense multi-family structures for the next five years until Metro votes on UGB expansion again.
- FireBeyond 11y agoWhat rises with house prices - property taxes. Revenue for Metro. I am going to assume there's a non-negligible correlation.
- pklausler 11y agoProperty tax revenue would rise with new construction as well.
- FireBeyond 11y agoWow. Good point. No idea why I didn't consider this. :)
- Tiktaalik 11y agoNot necessarily. The city decides what amount of revenue it wants to generate, then divides that amongst all properties based on accessed value. If in a year everyone's accessed value increases by the exact same amount, and the city doesn't increase the amount of total income they want to generate, no ones property taxes change.
- rconti 11y agoExactly. They cover one side of the coin ("we could never have afforded this in San Francisco!") but not the other side, the person actually LIVING in Portland at the time of the purchase, saying "we can't afford this!"
- cmurf 11y agoSame in Denver. Realtor told me 1/4 of properties don't make the MLS, they're bought with cash before they can get listed.
- leesalminen 11y agoBoulder as well. A buddy of mine had a hell of a time getting a condo with a mortgage. They were all bought up in cash within a day or 2.
- talmand 11y agoSomebody's busy setting up another housing bubble.
- jrjarrett 11y agoWho are these people and where are they getting that kind of cash?
- nostrademons 11y ago(Not OP, but know several people that do this sort of investing...) It's a combination of 1.) Wealthy Asian businesspeople who are looking for a place to park some of the foreign reserves they own overseas. 2.) Hedge funds, investing institutional capital in relatively "safe" investments with guaranteed revenue streams. 3.) Corporate prop-trading desks, parking corporate profits in tax-advantaged long-term assets until its needed. Google, for example, is a major owner of affordable housing developments. This is what often happens after a speculative bubble bursts: all the folks who invested based on irrational exuberance get cleaned out of the market, and then assets are transferred to other investors who are generally much more prudent, often using spare cash that was sitting on the sidelines. In this case, the assets just happen to be where everybody lives.
- arcanus 11y agoAustinite here. Analogous situation happening here, massive gentrification and home building, but still a sellers market.
- wavefunction 11y agoI think there's a lot of luxury condo development going on in Austin, but actual homes? Even our existing home inventory has been hit hard by investors looking to set up STR2s with AirBnB. The properties they prize are the exact sort of starter homes first-time homebuyers are looking for. There was just an article recently on the dearth of 3/2 houses available. I'm looking to buy a home soon so the recent municipal prohibition on STR2s gives me hope that the inventory will increase and allow some downward pressure on prices.
- TYPE_FASTER 11y agoSame in Boston, especially South Boston and the Seaport area.
- dkopi 11y agoIt's 2016, and people still think that if someone moves into your neighborhood, someone else has to move out. Rising demand is great. It means people want to enjoy your neighborhood. You can either meet that demand by increasing supply, or you can restrict the demand, and let certain people be outpriced by the market. Locals aren't victims of gentrification. They're victims of zoning laws and nimbyism.
- seivan 11y agoLocals are also (usually anyway) the source of those. At least in Stockholm. Avoid building apartments for those less off because of "greenery". http://www.dn.se/sthlm/hyresgaster-stoppar-nya-grannar/ http://www.dn.se/sthlm/hyresgaster-stoppar-nya-grannar/
- sliverstorm 11y agoSo consider a nice, quaint neighborhood. Person A lives there. Person B wants to live there too, because it is so nice. Ok, let's say we double supply. All the houses are now either twice as high, or half as big, or maybe the trees were cut down and the bushes ripped out to make room. There's twice as many people & everything therein. Is it still the same nice neighborhood?
- davidw 11y agoWas it the same neighborhood when you moved there? Things change, especially in the US. "The immaculate conception theory of your neighborhood’s origins": http://cityobservatory.org/the-immaculate-conception-theory-of-your-neighborhoods-origins/ http://cityobservatory.org/the-immaculate-conception-theory-... And: if prices are going up that much, and you really want out, you can sell and move, to, say, Lakeview, Oregon.
- sliverstorm 11y agoYes, things change. But I contest the notion that adding more housing to a neighborhood is a magic bullet that will make everyone happy. Among many issues, the fundamental attractiveness of a particular neighborhood may be tied to low population density. In which case ripping down the neighborhood and rebuilding makes neither resident Person A nor prospective buyer Person B happy.
- jgmmo 11y agoDear folks interested in Oregon, come to Eugene!
- davidw 11y agoGrew up there. Still seems like it's struggling to put together much of a tech industry. More seems to be happening here in Bend in some ways, despite being a significantly smaller town. And the weather is way better over here too!
- jgmmo 11y agoFortunately the future is remote work. Local jobs don't matter nearly as much once you can work for anyone remotely.
- FireBeyond 11y agoAnd then there's the breweries!
- davidw 11y agoAre there any significant population centers in Oregon that don't have a good brewery or two?
- FireBeyond 11y agoTouché!
- eikenberry 11y agoWe're still recovering from the housing bubble bursting. When that happened a ton of developers went out of business and building came to a stand still. The market demand eventually caught up with the overbuilding from during the bubble and have passed it creating a shortage again while the developers get to building. It should level off again in a few years as long as the city doesn't make zoning mistakes.
- davidw 11y agoThe problem is that it's all very uneven. A lot of people would love to live in the bay area, or Portland, but not so many people want to live in Lakeview, Oregon. But building more housing in the Bay Area is very difficult due to NIMBY rules and regulations.
- kyledrake 11y agoAlso a Portland resident. Portland now has the fastest growing real estate price increases in the country: http://content.kgw.com/photo/2016/03/29/s%20and%20p%20home%20price%20increase_1459278018966_1266387_ver1.0.JPG http://content.kgw.com/photo/2016/03/29/s%20and%20p%20home%2... This increase is not being matched by increasing salaries (they're increasing, but not at the same rate): http://koin.com/2016/03/31/report-portland-wages-not-keeping-up-with-home-prices http://koin.com/2016/03/31/report-portland-wages-not-keeping... There are potential implications of this. Not just for people living here already, but for workers that may or may not be able to maintain mortgages at these rates if there's a contraction in the "tech" sector. I don't know how many people are weighing these decisions on a 10+ year timeline. At the end of the day, I'm not sure how much of this is sustainable wealth. Portland got burned pretty badly in the 2000 crash, and really badly in the 2008 crash (at one point the unemployment rate was around 14%). History suggests it's a legitimate concern.
- driverdan 11y ago> locals are victim of gentrification You say that as if gentrification is a bad thing.